SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarter ended September 30, 2000 Commission File Number 1-7256
INTERNATIONAL ALUMINUM CORPORATION
(Exact name of Registrant as specified in its charter)
California 95-2385235
(State of incorporation) (I.R.S. Employer No.)
767 Monterey Pass Road
Monterey Park, California 91754
(323) 264-1670
(Principal executive office)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
At November 1, 2000 there were 4,244,794 shares of Common Stock outstanding.
Page 1 of 10 Pages
<PAGE>
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
INDEX
Page
PART I. Financial Information
Consolidated Balance Sheets -
September 30, 2000 and June 30, 2000 3
Consolidated Statements of Income -
three months ended September 30, 2000 and 1999 4
Consolidated Statements of Cash Flows -
three months ended September 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Signatures 10
- 2 -
<PAGE>
<TABLE>
PART I
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Unaudited Audited
Assets Sept. 30, 2000 June 30, 2000
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,586,000 $ 1,678,000
Accounts receivable, net 37,906,000 39,971,000
Inventories 38,075,000 43,384,000
Prepaid expenses and deposits 3,460,000 3,114,000
Future income tax benefits 1,113,000 1,113,000
Total current assets 82,140,000 89,260,000
Property, plant and equipment, at cost 112,067,000 111,149,000
Accumulated depreciation (56,839,000) (55,455,000)
Net property, plant and equipment 55,228,000 55,694,000
Other assets:
Costs in excess of net assets of
purchased businesses 9,386,000 9,533,000
Other 115,000 98,000
Total other assets 9,501,000 9,631,000
$146,869,000 $154,585,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 8,570,000 $ 6,503,000
Accrued liabilities 8,522,000 9,452,000
Advances payable to banks - 9,470,000
Income taxes payable 681,000 249,000
Total current liabilities 17,773,000 25,674,000
Deferred income taxes 4,585,000 4,585,000
Total liabilities 22,358,000 30,259,000
Shareholders' equity 124,511,000 124,326,000
$146,869,000 $154,585,000
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> <TABLE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Three Months Ended
September 30,
2000 1999
<S> <C> <C>
Net sales $53,784,000 $58,741,000
Cost of sales 39,689,000 41,165,000
Gross profit 14,095,000 17,576,000
Selling, general and administrative expenses 11,501,000 14,281,000
Income from operations 2,594,000 3,295,000
Interest (income) expense, net 141,000 (5,000)
Income from continuing operations
before income taxes 2,453,000 3,300,000
Provision for income taxes 920,000 1,329,000
Income from continuing operations 1,533,000 1,971,000
Loss from discontinued operations - 1,000
Net income $ 1,533,000 $ 1,972,000
Basic and diluted EPS:
Continuing operations $ .36 $ .46
Discontinued operations - -
$ .36 $ .46
Shares used to compute EPS:
Basic 4,244,794 4,291,794
Diluted 4,244,981 4,291,794
Cash dividends per share $.30 $.30
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> <TABLE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three Months Ended
September 30,
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,533,000 $ 1,972,000
Adjustments for noncash transactions:
Depreciation and amortization 1,868,000 1,778,000
Changes in assets and liabilities:
Receivables 2,065,000 (2,522,000)
Inventories 5,309,000 602,000
Prepaid expenses and deposits (363,000) 733,000
Accounts payable 2,067,000 (393,000)
Accrued liabilities (930,000) (1,594,000)
Income taxes payable 432,000 1,337,000
Net cash provided by operating activities 11,981,000 1,913,000
Cash flows from investing activities:
Capital expenditures (1,373,000) (3,708,000)
Proceeds from sales of capital assets 43,000 61,000
Net cash used in investing activities (1,330,000) (3,647,000)
Cash flows from financing activities:
Dividends paid to shareholders (1,273,000) (1,287,000)
Net borrowing under lines of credit (9,470,000) 3,257,000
Net cash provided by financing activities (10,743,000) 1,970,000
Net change in cash and cash equivalents (92,000) 236,000
Cash and cash equivalents at beginning
of period 1,678,000 2,269,000
Cash and cash equivalents at end of period $ 1,586,000 $ 2,505,000
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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<PAGE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (which consist solely of normal
recurring adjustments unless otherwise disclosed) necessary to present fairly,
in all material respects, its financial position as of September 30, 2000 and
June 30, 2000, and the results of operations and cash flows for the three
month periods ended September 30, 2000 and 1999. The results of operations
for the three month periods ended September 30, 2000 and 1999 are not
necessarily indicative of the results to be expected for the full year.
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that these
financial statements be read in conjunction with the financial statements and
the notes thereto included in the Company's latest annual report on Form 10-K.
Comprehensive Income
Comprehensive income, defined as net income and other comprehensive
income, for the first quarters ended September 30, 2000 and 1999 was
$1,458,000 and $1,945,000, respectively. Other comprehensive income includes
foreign currency translation adjustments recorded directly in shareholders'
equity.
<TABLE>
<CAPTION>
Balance Sheet Components Sept. 30, 2000 June 30, 2000
<S> <C> <C>
Inventories, lower of FIFO Cost or Market
Raw materials $ 32,276,000 $ 36,693,000
Work in process 1,610,000 2,054,000
Finished goods 4,189,000 4,637,000
$ 38,075,000 $ 43,384,000
Shareholders' Equity
Common stock $ 4,765,000 $ 4,765,000
Paid-in capital 4,123,000 4,123,000
Retained earnings 115,738,000 115,478,000
Accumulated other comprehensive income (115,000) (40,000)
$124,511,000 $124,326,000
</TABLE>
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<PAGE> <TABLE> Unaudited
Segment Information
The following presents the Company's net sales, operating income and total
assets by operating segment, reconciling to the Company's totals. All data
presented in thousands of dollars.
<CAPTION>
Net Sales: Three Months Ended
September 30,
2000 1999
<S> <C> <C>
Commercial $ 27,272 $ 29,802
Residential 15,601 15,769
Aluminum Extrusion 21,840 24,951
Total Segments 64,713 70,522
Eliminations (10,929) (11,781)
Total $ 53,784 $ 58,741
Operating Income (Loss): Three Months Ended
September 30,
2000 1999
Commercial $ 3,027 $ 3,658
Residential 1,213 1,067
Aluminum Extrusion (226) (388)
Total Segments 4,014 4,337
Eliminations 461 973
Corporate (1,881) (2,015)
Total $ 2,594 $ 3,295
Total Assets: Sept. 30, June 30,
2000 2000
Commercial $ 63,939 $ 66,937
Residential 33,495 32,510
Aluminum Extrusion 38,919 43,779
Total Segments 136,353 143,226
Corporate 10,516 11,359
Total $146,869 $154,585
</TABLE>
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<PAGE> Unaudited
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Significant Changes in Results of Operations
Net sales for the first quarter ended September 30, 2000 decreased by
$4,957,000 or 8.4% from the comparable quarter of the prior year. This
decrease includes $2,551,000 or 8.6% posted by the Commercial Products Group
and $2,187,000 or 16.5% posted by the Aluminum Extrusion Group. While the
comparisons show decreases from the first quarter of the prior year, they also
reflect the continued efforts to recover from the significant operational
problems incurred during the second and third quarters of the prior year.
Cost of sales as a percentage of net sales was 73.8% for the quarter ended
September 30, 2000 as opposed to 70.1% for the comparable prior year period.
This increase is largely attributable to higher material cost in the
Commercial Products and Aluminum Extrusion Groups, resulting from higher cost
aluminum consumption, while limited in our ability to increase selling prices
due to competitive pressures.
Selling, general and administrative expenses decreased by $2,780,000 or
19.5% for the quarter compared to the same quarter last year. The decreased
expenses are primarily attributable to lower employment costs directly related
to the aforementioned decrease in sales coupled with the prior year containing
nonrecurring costs associated with realigning operating group management
teams.
The swing from net interest income for the prior year quarter to net
interest expense in the current year quarter relates to the depletion of funds
available for investment due primarily to heavy capital expenditures in the
prior year. These expenditures were financed in part by utilization of a line
of credit, which was repaid during the current quarter.
The effective tax rate for the quarter ended September 30, 2000 was 37.5%
whereas the comparable period of the prior year was 40.3%. This decrease is
primarily attributable to available tax credits offsetting a smaller taxable
income.
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<PAGE>
Unaudited
Liquidity and Capital Resources
Working capital at September 30, 2000 stood at $64,367,000, an increase of
$781,000 from June 30, 2000. The ratio of current assets to current
liabilities is currently 4.6 as compared to 3.5 as of the beginning of the
year.
The Company's projected net capital expenditures for fiscal 2001 and
related financing remain unchanged from those described in the June 30, 2000
Annual Report. The Company's domestic line of credit remains unchanged from
that described in the June 30, 2000 Annual Report to Shareholders.
Forward-Looking Information
This report contains forward-looking statements with respect to the
financial condition, results of operations and business of the Company. Such
items are subject to certain risks and uncertainties that could cause actual
results to differ materially from those set forth in such statements. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date the statement was made. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
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<PAGE>
INTERNATIONAL ALUMINUM CORPORATION
AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
International Aluminum Corporation
(Registrant)
Date: November 13, 2000 MITCHELL K. FOGELMAN
Mitchell K. Fogelman
Senior Vice President - Finance
(Principal Financial Officer)
Date: November 13, 2000 MICHAEL J. NORRING
Michael J. Norring
Controller
(Principal Accounting Officer)
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